Discounted Cash Flow Calculation for CNSX:LVI using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method. We use
analyst's estimates of cash flows going forward 5 years for the 1st stage, the 2nd stage assumes the company grows at a stable rate into perpetuity.
CNSX:LVI DCF 1st Stage: Next 5 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Lightning Ventures's share price is below the future cash flow value, and at a moderate discount (> 20%).
Lightning Ventures's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Lightning Ventures's earnings available for a low price, and how does
this compare to other companies in the same industry?
In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Lightning Ventures has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.
This is quite a rare situation as 97% of companies covered by Simply Wall St do have past financial data. You can see them here.
Show me the analysis anyway
The future performance of a company is measured in the same way as past
performance, by looking at estimated
and how much profit it is expected to make.
Future estimates come from
professional analysts. Just like forecasting the weather, they don’t always get
Expected Energy Services industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare Lightning Ventures's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Lightning Ventures's earnings growth to the Canada market average as no estimate data is available.
Unable to compare Lightning Ventures's revenue growth to the Canada market average as no estimate data is available.
Unable to determine if Lightning Ventures is high growth as no earnings estimate data is available.
Unable to determine if Lightning Ventures is high growth as no revenue estimate data is available.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
All data from Lightning Ventures Company Filings, last reported 10 months ago, and in
Trailing twelve months (TTM)
annual period rather than quarterly.
CNSX:LVI Past Financials Data
Date (Data in CAD Millions)
*GAAP earnings excluding extraordinary items.
Performance in 3 years
In the same way as past performance we look at the future estimated return
(profit) compared to the available
funds. We do this looking forward 3 years.
Unable to establish if Lightning Ventures will efficiently use shareholders’ funds in the future without estimates of Return on Equity.
Examine whether Lightning Ventures is trading at Lightning Ventures'san attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.
Lightning Ventures's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
2/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Lightning Ventures's finances.
The net worth of a company is the difference between its assets and liabilities.
Lightning Ventures's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Lightning Ventures has no long term commitments.
This treemap shows a more detailed breakdown of
Lightning Ventures's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is not covered by short term assets, assets are 0.1x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Donald Rainwater, also known as Don, has been Chief Executive Officer, President and Director at Lightning Ventures Inc. since June 01, 2016 and Interim Chief Financial Officer since February 28, 2018.
Insufficient data for Don to compare compensation growth.
Insufficient data for Don to establish whether their remuneration is reasonable compared to companies of similar size in Canada.
Board of Directors Tenure
Average tenure of the
board of directors in years:
The average tenure for the Lightning Ventures board of directors is less than 3 years, this suggests a new board.
Is Lightning Ventures Inc (CNSX:LVI) A Financially Sound Company?
While small-cap stocks, such as Lightning Ventures Inc (CNSX:LVI) with its market cap of CA$2.84m, are popular for their explosive growth, investors should also be aware of their balance sheet to judge whether the company can survive a downturn.
Lightning Ventures Inc., through its subsidiary, Lightning Industries, Inc., manufactures equipment for oil and gas production. It provides products to enhance efficiency and increase the production of oil and gas wells. The company was formerly known as Highmark Marketing Inc. and changed its name to Lightning Ventures Inc. in June 2016. Lightning Ventures Inc. was incorporated in 2014 and is based in Vancouver, Canada.
Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.